Also, what protects you if your insurance company goes under?
Well, the regulator is supposed to have checked that they're doing things right.
But what if the regulator messes up and you buy insurance?
And now there's some big catastrophe and the insurance company goes bankrupt and
can't pay you.
So the state governments have set up insurance guarantee funds.
There's a lot of complexity to this whole business.
It's not so simple and easy.
So the first step, it wasn't until the 20th century that these even setup.
It's like deposit insurance when you have a bank.
When you go to the bank,
you'll see FDIC insured, Federal Deposit, Insurance Corporation, but
we have similar insurance of the failure of the insurance companies.
But not until 1941.
There was no insurance guarantee.
So, here's our local insurance guarantee fund, Connecticut Life and
Health Insurance Guaranty Association.
It was created in 1972, it's not, that long ago.
It's kind of remarkable, that before 1972 if your insurance company failed in
Connecticut you were just out of luck.
But now they will ensure your insurance against
a maximum death benefit of $50,000.
It's still not big enough because if you as a young person,
what is your present value, your lifetime present value?
It must be several million dollars.
So $500,000 just doesn't cut it, but at least it's something.